Trump Administration focuses on economic impact of Kigali

Before submitting the Kigali Amendment for Senate ratification, the administration wants assurance that U.S. business interests won’t be hampered.

The White House

The Trump administration is evaluating the potential economic impact of the HFC phase-down scheme under the Kigali Amendment to the Montreal Protocol as it decides over the coming months whether to submit the amendment to the Senate for ratification, an administration official said yesterday at a conference hosted by the Hudson Institute in Washington, D.C.

“If the president does decide to support Kigali – question there – it will be largely because he wants to protect and create U.S. jobs and advantage U.S. commercial interests,” said David Banks, special assistant to the president for international energy and environment.

While acknowledging that the amendment has “broad industry support,” he stressed the need for the administration to understand its effect on U.S. economic interests, including “how it can help the trade balance and foster exports to other countries.”

“We welcome all stakeholders to engage us during these deliberations,” he added.

A wide spectrum of U.S. industry – both the companies that market natural refrigerant systems and the chemical companies that make HFOs and HFO blends – have urged the Senate to ratify the Kigali Amendment. Industry representatives have pointed out that the competitive position of U.S. industry would be hampered if the U.S. does not ratify the amendment.

“

If the president does decide to support Kigali – question there – it will be largely because he wants to protect and create U.S. jobs and advantage U.S. commercial interests.” – David Banks, special assistant to the president for international energy and environment

Banks’ remarks are among the few made by the Trump Administration about the Kigali Amendment, which was established in October 2016 by almost 200 countries and will go into effect January 1, 2019, following ratification last November by the 20th nation that was a party to the amendment’s creation.

Last November, Judith Garber, principal deputy assistant secretary of the U.S. State Department’s Bureau of Oceans and International Environmental and Scientific Affairs, stated that the U.S. “has initiated the process to consider U.S. ratification of the [Kigali] Amendment”.

While saying that the U.S. supports “the goals and approach of the amendment,” Garber added that “there are a number of steps in our domestic process that we would need to complete before reaching a final decision on transmittal of the Kigali Amendment to the U.S. Senate for its advice and consent”.

Banks elaborated on how the administration is assessing the amendment, noting the emphasis placed on “protecting and enhancing U.S. competitiveness, particularly in the manufacturing sector”. That, he said, was the mindset used last year when the president announced that the U.S. would leave the Paris accord on climate change, making it the only country in the world to do so. More recently, Trump said he is “open to re-engaging in the Paris agreement if it’s a fair deal,” Banks noted.

In assessing Kigali, one of the most important issues, Banks said, is whether U.S. companies would face “discriminatory practices in international fora that unfairly disadvantage them.” At the same time, the administration is also considering what would happen to U.S. manufacturing “if we don’t ratify Kigali,” he said.

Another concern of the administration, Banks said, was how the requirements of the Kigali amendment would be met if the U.S. Senate ratifies it. His administration colleagues “are working to determine if available authorities exist, or if there is need for additional legislative authority to implement Kigali.”

The speaker who followed Banks, Jeff Holmstead, partner, Bracewell LLP, a Houston-based law and government relations firm, addressed the issue of whether U.S. authorities exist to carry out Kigali’s HFC phase-down requirements. “Once [Kigali] is ratified,” he said, “there’s a provision [under Title 6] in the Clean Air Act that the U.S. Environmental Protection Agency has the authority to implement that amendment.”

The National Resources Defense Council (NRDC) plans to work with industry and members of the Senate “on both sides of the aisle” to move the Kigali Amendment to the Senate for ratification “and get two-thirds of the Senate to approve it,” said David Doniger, senior strategic director of the NRDC’s Climate and Clean Energy Program, at a meeting hosted by the Hudson Institute in Washington, D.C.

He believes that there are enough Republicans along with Democrats to ratify the amendment.